Seminar: Poor governance, lack of information and protectionism weaken the single market

Seminar: Poor governance, lack of information and protectionism weaken the single market

Published 19/12/2012

With a view to discuss how to strengthen the single market for products and services, Nordic Innovation and MEP Roza Thun arranged a seminar in the European Parliament on 14 November. The background for the seminar was the report launched in June by Nordic Innovation, suggesting that Europe losses as much as 1/3 of the potential economic gains from single market initiatives due to poor national implementation of EU legislation in the member states.

All the Nordic countries are small open economies and highly depending upon market access and a well functioning European single market. However, even though the single market could celebrate its 20 year anniversary in 2012, consumers and businesses are still facing illicit cross border problems between the European countries.

In 2012 Nordic Innovation together with the Danish Business Authority and the Swedish National Board of Trade contracted Copenhagen Economics to look closer into the problems within the single market - the working hypothesis being that poor implementation of EU legislation in some of the member states could be a problem.

The analysis from Copenhagen Economics confirmed this hypothesis. Rough indications suggest that the lack of proper implementation and application could reduce the expected economic gains from the core directives and regulations with as much as 1/3: Equivalent to a large two digit billion loss in Euros.

The reason to this is that the member states do not always fully adapt their national law framework to truly and completely comply with new EU legislation. Furthermore, actual "real life" applications by civil servants and case handlers in national authorities is poor in some instances.

On the backdrop of the findings in the report, Nordic Innovation teamed up with a member of the European Parliament’s committee for Internal Market and Consumer Protection (IMCO), Roza Thun, and arranged a seminar in the European Parliament to discuss the problem and how to tackle it. Representatives from the Parliament, the Commission, member states and the business community participated in the seminar.

Member states play a key role

It was generally agreed that there is a problem with enforcement or “governance after adoption”. Furthermore, that key to a successful single market are the member states and the hundreds or thousands of agencies and authorities who handle single market legislation. In the agencies there are sometimes lack of information or technical problems, when authorities in country A delay consideration of cases, or make wrongful decisions, because they don't have any contact with their counterpart in country B, was pointed out as an issue.

The panelists also mentioned protectionism as a problem. Here public procurement could serve as a case in point. Poor legislation was also brought up as a problem, either that the new legislation is not adequate or that there remains legislation or procedures in conflict with the new legislation.